U.S. Department of Health and Human Services Issues Guidance on Essential Health Benefits

On Dec. 16, 2011, the U.S. Department of Health and Human Services (HHS) released an information bulletin outlining how it plans to implement the Affordable Care Act’s requirement that insurance plans offer at least a minimum set of essential health benefits. This guidance is important because it sheds light on what kinds of services will be available to individuals enrolled in the Medicaid expansion and in plans on their state’s health insurance exchange.

Under the Affordable Care Act, individuals who are newly eligible for insurance coverage will be enrolled in benchmark plans. These plans must cover at least the essential health benefits package, which includes ten specified categories:

In the bulletin, HHS announced that it intends to give states flexibility in selecting a benchmark plan that reflects the scope of services offered by a “typical employer plan” in their state. The possible benchmark insurance plans are:

One of the three largest small group plans in the state by enrollment;

One of the three largest state employee health plans by enrollment;

One of the three largest federal employee health plan options by enrollment;

The largest HMO plan offered in the state’s commercial market by enrollment.

The default benchmark if a state does not select one of the above options is the small group plan with the largest enrollment in the state.

Compliance With Federal Parity Required

Of particular importance to NAMI, the bulletin confirms that mental illness treatment services are a required benefit category that these benefits must be offered at parity with medical/surgical benefits. If the plan that is selected as the state’s benchmark plan does not currently include these services at parity, modifications must be made to the benchmark plan. Parity applies to individual plans as well as small group plans – a provision that was inserted into the law due to an amendment by Senator Debbie Stabenow of Michigan during the health reform debate. This amendment makes clear that all plans offered through the state Exchanges must comply with the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008. NAMI is extremely grateful for Senator Stabenow’s leadership in ensuring that parity is broadly applied to insurance products sold in the exchanges.

Concerns Regarding State Flexibility

Of particular concern to NAMI are some of the options available to states for selecting a benchmark plan for Essential Health Benefits. While adherence to parity will be a critical feature, it is worth noting that in many states, the largest small employer plan may still contain gaps in coverage that parity cannot resolve. For example, in the case of prescription drug benefits, the bulletin specifically notes that coverage can be limited to a single medication in each therapeutic class. The bulletin also declares that critical access protections under the Medicare Part D plans will not apply as part of Essential Health Benefits. This includes a requirement for plans to include “all or substantially all” of the medications in certain therapeutic classes such as antipsychotics and antidepressants.

Public Comments on Essential Health Benefits

HHS will be collecting public comments on its proposed approach through the end of January 2012. NAMI will be submitting comments and developing model comments for state and local affiliates to submit as well.